Psychological reasons to start a side business
Many jobs do not lead to self-actualization. Your business or side project does.
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Many are familiar with Maslow's Hierarchy, and the peak of self-actualization, or becoming the most that one can be. The full expression of the self. As Instagram Moms say, living your best life.
Without a doubt, reaching our needs as a human requires work. So it follows that reaching self-actualization requires A LOT of it.
But can this be achieved through a job, i.e. working for a boss? My gut reaction is to say it can happen only when the person doing the job has lots of autonomy and/or investment in the mission of the business.
Can it be achieved through starting a business? On this, I'm certain the answer is yes. Even though my business experience is limited to one-person endeavors, mostly selling services, I’m confident in the answer.
What are the psychological benefits of starting a side business? The challenges faced when you’re 100% responsible for getting customers and delivering a product or service push you to maximize strengths and address weaknesses.
Of course there are myriad factors that impact the success of a business, but it still remains true that the person running the show is accountable for the business's performance.
It’s this point, accountability plus the one thing required to make a business a business - sales - that are the two main psychological benefits I’ve encountered from freelancing for the past five years, and launching a few digital products.
Accountability, or the Owner’s Mindset
Jocko Willink wrote a book called Extreme Ownership. Despite the hyperbolic title, it’s a powerful concept. When you launch your own business, it’s your thing. By definition, you are the owner. So you better take ownership.
This is a responsibility, but it is also empowering and motivating.
Even if you have never run a business of any kind, you can infer that this is true by looking at the opposite situation. Most people fear or try to avoid a loss of control and freedom. This is part of why people are claustrophobic. It’s sometimes why people move from country to country. It’s sometimes why people change jobs.
A business takes this to a next level, which brings with it risk and feelings of discomfort, but also the possibility of even more of the benefits of freedom and control than many other situations.
When you earn money from your efforts without an employer involved, there is a sense of financial control, too. No, you may not print money on demand, especially at first. But starting any kind of business brings a sense of satisfaction because you have done the whole thing, from coming up with the idea, to completing the transaction, to delivering the product or service, and to then hopefully getting a repeat customer or positive feedback. You realize that if you need money (or just want more) you can take reasonable steps towards earning it. It may not happen right away, but it is within your control.
This is a big shift from a job, where your employment status, salary, and day to day schedule can feel like they are in the hands of others.
Ramit Sethi talks about the idea of Invisible Scripts. These are stories we tell ourselves, that were imprinted at some point in our lives and have a limiting effect on us. Other people have similar terms with similar meanings. The point is that we tell ourselves certain things, that may or may not be true, but they don’t let us succeed to the extent that might otherwise be possible.
This was true for me with sales.
I picked up the idea that sales was risky, difficult, and something people were just naturals at - or not. And I had the idea in mind that I was not.
Fortunately, I discovered a backdoor to sales through copywriting. This led me to learn the psychology behind sales and apply it in a way I was more comfortable with.
Basic sales principles include framing, anchoring, contrast, visual language, pain points, etc. Then there is the actual sales process, including prospecting, qualifying/disqualifying, framing, handling objections, presenting the price, etc.
Learning these led to tangible improvements in the form of better clients, better projects, and better rates for. It has also improved my communication in personal and professional relationships.
If you start a side business, you will need to learn at least a little about sales. And learning that skill will carry over into many areas of your life.
As a non-salesperson, I wouldn’t have had the motivation to learn these skills if not for needing to do the sales on my own to get freelancing clients. This is the main point again. When you are accountable for the business, you have to do things you would otherwise avoid.
This is a quick list of tasks you have to do in the course of running a side business that lead you to build confidence and otherwise improve your mindset.
Attending events - Attending an in-person to represent yourself as a business, meet people, strike up conversations, and get a good return on your investment of time and money is different than going to sit in the crowd and listen to people talk. You’ll take it more seriously. You’ll think about what you’re wearing. You’ll consider how you introduce yourself. You’ll figure out your 1-sentence pitch. All valuable stuff.
Sending invoices - There is a lot here. First, you’ll learn that almost everything in business can be started using free tools. If you’re focusing on the fancy stuff right away, you’re distracted. First client or customer? Just share your PayPal email or Venmo. Eventually you can present a more professional look, and get a professional invoice template or software.
Setting payment terms - Can you negotiate payment in advance? Are you willing to ask for that and risk hearing no? If so, how will you respond?
To go one step further, you may eventually use payment terms as a way to disqualify certain customers or clients. If you have strict payment terms and someone does not agree to them, are you willing to talk away?
Grappling with all of these points, especially because they are so closely related to money and value, is a big psychological workout.
Following up - When you are doing outreach for the first you will go through mental gymnastics around following up with people via email, call, DMs, etc. You’ll think, Am I bothering this person?
No, a follow up is doing the person a favor if you genuinely think you can help them. Everyone is busy and can use a reminder. Plus, maybe your follow-up message reaches them at a better time than your last message did.
[Read more on this topic in my post on why those witty church signs teach you about good writing by clicking “Read More” above]
Delivering a service - Considering yourself a professional. Do your best work, and stay up on your craft so that you’re capable of doing your best work. Set and follow deadlines (this alone is surprisingly seen as good work by many).
Dealing with ups and downs - There is a practical aspect of this (i.e. cash flow) but the psychological part is closely related. In short, it’s confidence. Do you believe in your ability to generate more opportunities for yourself when there is a dip in your business? Do you have the discipline to treat a large influx of cash in a responsible way? Can you maintain your energy and clarity of thinking throughout all of these situations, and mostly just stick to your plan?
There are certainly more aspects of doing business that lead you to face your demons and grow psychologically. Feel free to share more in the comments.
These things lead to growth
Maybe this post means you should start a business. Maybe not.
The one point I want to convey is that you will grow when you take on a challenge that requires accountability, responsibility and some stakes, i.e. a reason to succeed.
Maybe that means volunteering to raise money for a cause you care about. Maybe it means running for your local board of education. Maybe it means starting an Etsy shop to save up for your kid’s education.
There are certain projects you can take on where, if you follow through, you will grow, almost regardless of your outcome. Do those things.